Correlation Between CHINA SOUTHN and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both CHINA SOUTHN and Siemens Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CHINA SOUTHN and Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA SOUTHN AIR H and Siemens Energy AG, you can compare the effects of market volatilities on CHINA SOUTHN and Siemens Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CHINA SOUTHN with a short position of Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA SOUTHN and Siemens Energy.
Diversification Opportunities for CHINA SOUTHN and Siemens Energy
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CHINA and Siemens is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG and CHINA SOUTHN is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CHINA SOUTHN AIR H are associated (or correlated) with Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of CHINA SOUTHN i.e., CHINA SOUTHN and Siemens Energy go up and down completely randomly.
Pair Corralation between CHINA SOUTHN and Siemens Energy
Assuming the 90 days trading horizon CHINA SOUTHN AIR H is expected to under-perform the Siemens Energy. But the stock apears to be less risky and, when comparing its historical volatility, CHINA SOUTHN AIR H is 1.17 times less risky than Siemens Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Siemens Energy AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,903 in Siemens Energy AG on October 13, 2024 and sell it today you would earn a total of 3,047 from holding Siemens Energy AG or generate 160.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA SOUTHN AIR H vs. Siemens Energy AG
Performance |
| Timeline |
| CHINA SOUTHN AIR |
| Siemens Energy AG |
CHINA SOUTHN and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA SOUTHN and Siemens Energy
The main advantage of trading using opposite CHINA SOUTHN and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA SOUTHN position performs unexpectedly, Siemens Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Siemens Energy will offset losses from the drop in Siemens Energy's long position.| CHINA SOUTHN vs. PLAYSTUDIOS A DL 0001 | CHINA SOUTHN vs. Playtech plc | CHINA SOUTHN vs. PLAYTIKA HOLDING DL 01 | CHINA SOUTHN vs. Playmates Toys Limited |
| Siemens Energy vs. Air New Zealand | Siemens Energy vs. CHINA SOUTHN AIR H | Siemens Energy vs. SYSTEMAIR AB | Siemens Energy vs. Westinghouse Air Brake |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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